As Mideast Lashes Out Against Corruption, Chamber of Commerce Lobbies to Weaken Anti-Corruption Law

Hundreds of oil ministry workers demonstrate against the corruption in the ministry during a protest in Firdos Square, in Baghdad, Iraq, on March 9, 2011. (Ali Al-Saadi/AFP/Getty Images)

Even as anger over governmental corruption has exploded into protests across the Middle East, the U.S. Chamber of Commerce has been working to weaken the law that bans companies from bribing foreign officials.

That effort, which has been going on for months, recently got ratcheted up when the Chamber hired former U.S. Attorney General Michael Mukasey to lobby specifically on “possible amendments to the Foreign Corrupt Practices Act,” according to Mukasey’s lobbying registration document. The FCPA, passed in 1977, prohibits U.S. companies and foreign companies whose securities are traded on U.S. exchanges from paying bribes to foreign officials.

The U.S. Chamber’s Institute for Legal Reform, in a report last fall [PDF], said that both the Justice Department and the Securities and Exchange Commission had become “increasingly aggressive in their reading of the law” within the last decade, bringing more FCPA enforcement actions than ever, netting higher fines and filing more cases against individual company employees.

The Chamber of Commerce argues that aggressive enforcement of the anti-bribery law makes U.S. businesses less competitive than their foreign counterparts, though the law also applies to some foreign companies. The Chamber is pushing for Congress to make changes to the law, such as defining “foreign official” and requiring “willfulness” for corporate criminal liability.

Butler University Assistant Professor of Business Law Mike Koehler used to represent clients facing FCPA charges. He told me he agrees with some of the Chamber’s objections, but doesn’t think it needs a legislative fix.

The law is fine, Koehler told me. But the Justice Department and SEC “are continuing to push the envelope” with enforcement, applying the law in ways that Congress didn’t originally intend. One example of that, he said, is that about 60 percent of current FCPA cases involve payments made to employees of state-owned or state-controlled companies. Those people shouldn’t be considered “foreign officials,” he said.

Koehler said his main issue with FCPA enforcement is that the allegations are almost never subject to judicial scrutiny because these cases always settle. Asked why this is, given that most defendants are giant multinational companies with enough resources to take the corruption charges to court, Koehler said that the “the cost of aggressively mounting a legal defense based upon the statutes, elements, and facts of case are too risky.”

Mark Mendelsohn—formerly the Justice Department’s chief FCPA enforcer and now in private practice—told the Wall Street Journal last week that he expects current enforcement trends to continue. He cited the Mideast protests as part of a “growing recognition of what people commonly call the corrosive effects of corruption on development and democracy and democratic institutions.”

The U.K. is currently finalizing its own anti-bribery law, which would seem to address the Chamber’s objections about an uneven playing field. The Chamber, however, writes in its report that U.S. authorities may try to apply even more pressure to companies “so as not to be outdone” by Britain in the area of anti-corruption enforcement.

16 comments

The U.S. Chamber has also supported the criminal actions of MetLife insurance company even after receiving my U.S. Supreme Court motion that had the following quote from U.S. District Judge Richard Enslen :

“MetLife and its henchmen should appreciate that such conduct may itself precipitate the suicide death of a person who has placed implicit trust in their organization to foster mental health.This record is an open indictment of MetLife’s practices and treatment of the mentally-ill and long-term disability benefits.”

You can see more shocking quotes about MetLife written by numerous Judges’ by going to :

After seeing the Judges’ quotes in the motion I filed (and also sent to the U.S. Chamber because they were a respondent )the U.S. Chamber did not change the following statement in their Supreme Court Brief supporting MetLife :

“ERISA’S FRAMEWORK PERMITTING A SINGLE ENTITY TO PERFORM FIDUCIARY AND NON-FIDUCIARY FUNCTIONS HAS OPERATED EFFECTIVELY AND FAIRLY”

That is a huge and deadly lie !!

Making things exponentially more dangerous is the fact that the crimes exhibited by MetLife at the website above are being committed by multiple insurance companies in five different types of insurance including Workmans’ Comp, Disability, and Injured War Zone Contractors’ insurance as seen at :

(Please remember that link (1) of that website is in reference to the first website seen above)

Here is the long title to my Motion to Intervene in the case of MetLife verses Wanda Glenn. I wanted to be sure that anyone who read the title has a spiritual and legal awareness of the destruction of lives that MetLife is causing :

Brief Supporting Motion To Intervene Regarding Metlife’s Conflicts Of Interest, As Evidenced By Quotes From Honorable U.S. District And Court Of Appeals Judges Who Indicate Metlife And Their Physician Consultants Ignore Very Serious Medical Symptoms, Including Lesions And Plaque On The Brain Of Multiple Sclerosis Patient Jacquelyn Addis, A Foot Broken In 5 Places In The Case Of Patient Joanne Vick, And Many Case Quotes Where Metlife Ignored More Claimants Serious Medical Symptoms

I pray ProPublica will link all five types of insurance company crimes and shine a light on them so the criminals cannot hide behind their powerful connections such as the U.S. Chamber !!

There are undoubtedly going to be many comments picking apart the Chamber of Commerce and the shoddy ethics of the business they support. Fine and well. But that doesn’t scratch at the problem. Action to have our courts take a firmer hand about the moral and ethical decay of
American corporations and businesses is good and well too, but that is not going to change much very soon, either (and certainly not until Santa Clara v. Southern Pacific RR (USSC, 1886) is clearly reversed and repudiated by our courts and their status as ‘persons’ is removed. Again, that’s not going to happen anytime soon.

In the meantime, there is something we could do to halt this gross erosion of social and economic justice. We can make an end-run around the businesses, their allied associations and politicians who all enjoy the largess of these corrupt practices. We can form alternative organizations that create written and legally binding sets of ethical principles regarding social and economic, social and environmental justice to which its members must agree. It can trademark special planet- and people-safe logos and seals that will appear on the letterheads, products and activities of its members which are certified to be practicing but the standards they set. And it can create legal avenues of recourse for those injured when a member fails to abide by those standards. Yes, businesses that adhere to these standards may be at a competitive disadvantage to those that don’t (e.g. paying a living wage versus paying substandard wages.) But the advantage is that those of us who are socially conscious will be will to pay a little extra when we see that label and, more importantly, not patronize those businesses and corporations which are not certified. It will take time, and effort, of course. But it is something we can do without permission of our government; without having to buy politicians; without having to persuade socially-deaf judges and the phalanx of lawyers that are hired to shout in their ears. We can do it by, of and for
ourselves and the Chamber of Commerce’s won’t matter any more - they will become a liability to their members and will wither away, along with the corrupt business they support.

It is heartening to hear that the Justice Dept. and the SEC are making some uphill progress. Unfortunately, the Chamber of Commerce has decided that what works for business, the lobby system, should be worth a try for collective business. There are always those who are willing to compromise ethics to make a buck, but now we have an example of oraganized moral decay! This will give our kids all something to study in business school. Before we know it the import/export folks will start complaining that smugglers have an unfair business advantage, those darn tariffs. (Are they still called tariffs?)

I like red slider’s idea. An identifiable association of businesses adhereing to a well defined code of ethics. Sort of a Fair Trade for developed nations. Sounds like he has a business law background…

I’m not sure if I am understanding Mark Mendelsons statement correctly.
Is he blaming corporate corruption for the failure of emerging democracies? This makes perfect sense! In the Middle East they hate our capitolistic society. I wonder what it would take to convince the average poverty stricken middle-eastern family that we don’t like it either. (Please don’t try to kill us anymore.)

Interesting lead story but don’t you believe in “first things first”. Can you delve more into the Obama Administration’s foreign policy execution in the Middle East? Or is this lead article the beginning of a campaign to blame America for what is happening in the ME and to divert attention from the “progressive” realist response to the crisis? I’m a new reader of ProPublica but it is starting to feel very much like the NYT’s.

James, if you are trying to protect Obama please go to http://www.obamaknowsdoctorscrimesendangerlives.blogspot.com and explain how the Obama administrations protection of insurance company doctors’ who ignore brain lesions, cancer, and feet broken in five places fits into your “progressive” realist discussion.

And we wonder why those in foreign countries dislike us…In the 21st century haven’t we learned that our acts of self interest simply have not paid off on the long run. Corrupt foreign reps add to overall economic depression in many countries. We prefer to think of ourselves as exceptional… what’s exceptional about bribery? What’s exceptional about contributing to corruption? What’s exceptional about winning the contract at any cost? Every action has a consequence. The US Chamber of Commerce continues to view the world through narrow and dumb eyes.

I wonder what aweful consequence of their actions will finally make them really see.

There is NO consequence of any of our florid Chambers of Commerce actions which will finally make them really ‘SEE’. There is no optical cure for Greed. Greed is like UGLY, which, unlike beauty, is clean to the bone.

This makes we wonder why we, middle class Americans do not do the same, with corruption. We know it exists, in the name of the Tax Code, bought and paid for by large corporations, and contributors to elected officials.
We stand idle and watch this happening, when our Declaration of Independence states Political Bands are unacceptable in our society and yet we have let them grow and nurture at the cost of ‘one people’.

Plutocracy: is formally defined as government by the wealthy, and is also sometimes used to refer to a wealthy class that controls a government, often from behind the scenes. a system of rule that is mostly by and for the rich and super rich. group of privileged people might shape the economy and government for their own benefit
End of Story

Hmmmmm, feels pretty good to have a tough law constraining US companies from foreign bribery. On the downside side, however, it’s pretty hard to watch countries like China waltz into Afghanastan, bribe several of Karzai’s well-placed family members, and walk away with the world’s largest undeveloped copper reserve - all while stridently condemning the US for its involvment. Is this what our young men and women die for? Before being tempted to blame Obama, consider that very similar scenarios occured under Bush/Cheney with Iraqi oil.

Now if we can just get a domestic “Corrupt Practices Act”! Of course it would have to exempt lobbying, but that should be no problem at all for our current Congress.

ProPublica is off to a great start on this broad subject (corruption, corporatism, bribery, Mid-East, etc). U.S. corporate skullduggery is a leader in this for decades, and includes Central America, South America, and Africa. That cup of coffee tastes good in the morning, doesn’t it?
Overall, ProPublica is doing a great job tying these things together in this necessarily long series of reports. Their input of individual and concerted mental effort and experience provides us a rock to stand on toward understanding and contributing to rectify this difficult situation. They also pour a tremendous amount of plain old foot slogging labor into the effort.
The one-liner comment by Max Shelby is great: “Corporate corruption is like a cancer of which there is no cure.” The rebuttal, of course, is the time-worn (and still decades ahead of its time) Chamber of Commerce mantra that anything aiming to reign in corporate bribery or corruption “makes U.S. business less competitive,” and is therefore bad.
The report states Professor Koehler as implying enforcement is “pushing the envelope” (I hate that phrase) in excess of original Congressional intent. My answer to that is that possibly the law is not being obeyed as regards its “original intent” and it is, therefore, prudent to strengthen enforcement.
In the report Mark Mendelsohn cites the Mideast protests as part of a “growing recognition of what people commonly call the corrosive effects of corruption on development and democracy and democratic institutions.” I venture that this applies to much of the semi-developed world. Democracy thrives only on open and ethical behavior, while non-democracies require a closed and corrupt society.
Red Slider’s (comment 25 Mar) suggestion of an association of ethical businesses adhering to a clearly defined code of ethics indicates some astute observations and thought on Red’s part. Such a movement may be the only viable solution. There are such corporations today, but to reach outward, and upward into the giant echelons of corporatism and corruption, is a formidable challenge. It requires local insistence (protests, actually) of individual citizens like you and me, and more than simply voting in the next election.

We are no longer a democracy. As stated, we are a Plutocracy. Only ProPublica, NPR, public boroadcasting, etc. can keep the public informed yet the Plutocracy wants to defund and even eliminate these voices. No wonder!

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